The scheme, used in conjunction with a £5,000 government Boiler Upgrade Scheme (BUS) grant, could mean heat pumps for some homes will cost less than many gas boilers.
Benefiting around 40% of UK homes
The offer is designed to benefit the around 40% of UK homes (10 million) which are already suitable for heat pumps, or around 65% (14 million) with minor efficiency measures (such as loft insulation) carried out.
The new scheme will also unlock greener energy for UK households. Air-source heat pumps are a low-carbon source of heating – running on electricity, increasingly from renewable sources – and are 3-4 times more energy efficient than gas boilers.
The news comes as UK homeowners face the worst cost of living crisis in a generation.
With higher efficiency and lower maintenance requirements than gas boilers, heat pumps are often cheaper to run than their fossil fuel counterparts. Under current energy prices, a heat pump could save a typical home £187 per year compared to a gas boiler.
Weaning the UK off fossil fuel
The pilot is the latest in Octopus Energy’s roster of initiatives designed to wean the UK off fossil fuel and become more energy-independent. Earlier this year, the energy supplier, which is the third biggest in the UK, acquired heat pump manufacturer Renewable Energy Devices (RED) in a move to build cheaper and better heat pumps for the UK.
The pilot is the first step in the partnership between Octopus Energy and Lloyds Banking Group, with more projects in the pipeline to accelerate the green energy transition at home.
Rebecca Dibb-Simkin, chief product officer at Octopus Energy, said: “We’re always looking for ways to help people save money while accelerating the shift to a clean energy future.
Accelerating the shift to a clean energy future
“The pilot with Lloyds Banking Group comes at a crucial time for consumers facing a dual climate and cost of living crisis. It no longer needs to be a question of prioritising one over the other: heat pumps are greener than gas boilers, and thanks to Octopus, the government and Lloyds Banking Group they can be cheaper too.”
Jas Singh, CEO consumer lending, Lloyds Banking Group, said: “Our partnership with Octopus adds another element supporting our strategy to help Britain live in better, warmer, greener homes and move the country towards its net zero targets.
“Lots of homeowners who need to replace, or want to upgrade, a gas boiler may have considered the switch to a heat pump but see the cost as a barrier. This extension to our Green Living Reward scheme will make switching from a gas boiler to a new, more efficient, cheaper-to-run heat pump easier and more affordable than ever before.
“We won’t stop here. We are committed to playing our part in reaching net zero by continuing to support and encourage our customers to make greener choices for their homes. This pilot is just the first from our partnership with Octopus Energy; we will continue to innovate, we will continue to help make Britain’s homes better for their owners and better for the environment.”